NWA mom shares how she whipped (a whopping) debt into shape

By Stephanie McCratic, Evolved Mommy blogger

Stephanie McCratic and her daughter

When my husband and I started dating I was 30 and he was 31. We’d both had a fantastic time accumulating debt in our 20s. We both also had unjustifiably expensive taste.

Each of us could see the error of the others’ ways. We could not, however, see our own errors.

Shortly after we got married a co-worker mentioned a Dave Ramsey Financial Peace University class that was starting at her church. When Steve mentioned it to me I thought, “Oh this is perfect. He will see how ridiculous his spending is. Finally!

After the first of six weekly classes we got in the car and sat stunned. This was huge. We needed help. We need to turn this barge around fast. Have you ever seen a barge turn around fast?

The class was taught by Chris Haas, who is one of the most caring, loving and financially inspiring people I have met. One of the first things he instructed us to do was add up our current debt. (Note from the mamas: Watch for a giveaway with Chris on the site tomorrow!)

Based on our best guesses we estimated we had *gasp* $14,000 in debt.


When we actually sat down with everything we could find we were SHOCKED to learn we had $50,000 in debt! $50,000! And that doesn’t include any student loans or mortgages.

How had this happened? Surely we were hopeless.

Steve had a modest salary and I had a job I hated. There was no way we were ever going to fix this. I started visualizing food stamps, working into my 90s and life in a single-wide trailer. Seriously. This is what I thought we had coming.

Let me tell you, three years later I’m a stay-at-home mom to our beautiful 19-month-old daughter, we are down to our last $3,000 in debt and we are going to look at houses tomorrow.

How did we get here from there?

I’d like to tell you we were 100% disciplined, did everything we were told and prayed about it every day.

Truth be told we went to all six of those classes, did what we were told to the best of our ability and prayed nearly every day.

The system that worked for us was a modified version of the Dave Ramsey system of cash envelopes and methodically transferring and paying off debt.

Dave Ramsey Cash Management System:

  1. Complete a monthly budget (there are some great online tools for this)
  2. Create an envelope for each budget item and label each with the amount needed per month. Ex: Mortgage $1200, Auto Care $200, Clothing $100. Be sure to include spending or “fun” money in your budget.
  3. When you get paid cash your check and put the specified amount into each envelope (if you get paid twice per month, only put half the amount in each pay period).
  4. Once a month or once a pay period deposit the bill envelopes into an account designated as your “Bill Pay” account and deposit the less regular categories along with your savings envelope into a savings account. Keep your allowance envelopes (fun money, clothing, gas, groceries) in cash.

Once your cash is gone from an envelope it is gone until you get paid again. No borrowing from another envelope!

It is so much more painful to spend cash than to use a debit card. I noticed the biggest difference at Wal-mart. Before I wasn’t concerned with the exact amount of my grocery bill, now that I use the cash system I know that I have $150 dollars to spend.

How embarrassing would it be to have to tell the cashier to take some things out of the bag?!

Once we had our cash management system in place we started paying down our debt. The crazy thing is that paying off debt became an obsession. It was totally addictive.

Most of our debt was credit card, but we also had one giant new debt that I was scared to mention. It was the elephant in the garage: Steve’s brand new Toyota FJ Cruiser (Hummer-type SUV) with the off-road package (because there are so many opportunities to go on safari in Northwest Arkansas).

First, the credit cards.

  1. List your debts in order from smallest to largest.
  2. Pay of the smallest first then roll that payment into the next one on the list.

It’s amazing how fast this works. I’m not over-simplifying here. Remember, though, we had a limited income. So where did the extra income come from? We started selling stuff on eBay and Craigslist. We had gaming systems we’d never used, expensive clothes that had never been worn, etc. Steve became an eBay guru!

The payment on the FJ Cruiser was $550. We needed that money, so Steve sold it on eBay and we actually made a profit on his car! This never happens. Apparently this particular SUV is popular in Nigeria and nearly impossible to get. We took the cash we made and bought a used BMW station wagon, eliminating that car payment entirely and rolling it into our credit card payments. Huge!

I firmly believe the car deal was God’s work. If you meet me in person ask me to tell you that story. It involves pirates. For real.

We still sell stuff, we still meet with Chris (less often now) and we still use a version of the cash management system. I work part time as a Premier Designs Jeweler, which has added $1,200 to our monthly budget. Steve has gotten several raises and we are a much happier little family without all that heavy debt.

Dave Ramsey says, “Live like no one else, so later you can live like no one else.” This means buckle down now. Work more, spend less, sell stuff. It won’t be like this forever if you do the work now.

“Faith without works is dead.” James 2:26

Stephanie’s Money-Saving Tips:

e-mealz.com This site provides weekly meal plans and grocery lists that truly minimize your grocery bill. The average weekly menu uses $50 in groceries. $15/three months.

oldsoulorganics.com This is a local CSA that delivers fresh, organic food to your doorstep. We do the medium box, which is a big plastic tote full of fruits and vegetables. Cost: $35/week

craigslist.com We buy and sell stuff here pretty regularly

eBay.com Steve just bought another car last week through eBay.

I make our laundry detergent. Cost: $9/year (“Duggar Laundry Detergent”)

We don’t have cable. We have an HD antenna for our local channels and an Apple TV device for everything else.

We splurge occasionally. This helps keep us sane and motivated.

UPDATE: We are not going to buy a house right now. The message? Just because you can doesn’t mean you should. We will stay in this tiny, out-dated house in a far away town for a while longer so that we can save more money.

Stephanie McCratic is a 30-something first-time mom who is addicted to social media and technology. She is the coordinator of the Fayetteville MOPS (Mothers of Pre-Schoolers) group and a general social butterfly. You can follow her on twitter at @evolvedmommy or read her blog www.evolvedmommy.com.

1 Comment

  1. I love your bog and have found some great resources from it! Thanks for sharing! We need to get back into the envelope system!

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